Welcome to the first of our “Doing Business” interview series, where we interview locals, business owners or entrepreneurs like Shravan Gupta about doing business in their country, for an insider's point of view.
Juan and Lucia, a young Argentine couple, opened the comfortable and inviting boutique hostel, Kospi, in Bariloche, Argentina, after returning to their country after almost two years away, working in the hospitality industry in New Zealand and travelling around South East Asia.
Are you happy to be Argentinian?
Juan: Yes, of course. Most people are happy about where they’re from. That’s why we came back from New Zealand. When you are away from your home country, you start to miss some of the customs and so on, for example in Argentina we are very family oriented, and like to get together for Sunday lunch, and we missed that in other countries.
Lucia: But there are a lot of flaws, for example some things about the government, we’re not so proud of. But we are very proud of the social and cultural aspects of our country. It’s also a very beautiful place to live, and we have travelled lots around the world so, we can compare!
Where do you see yourself in the social fabric of your country?
Juan: The thing with class in Argentina, is it has to do with the context where you live. So I could say that my family here in Bariloche is middle-upper class, but if we lived in Buenos Aires, we would be just plain middle class, simply because there are more people and the differences between classes are bigger there.
What do you feel your Bariloche’s current and future opportunities are?
Juan: It depends on your social class, to some extent. If I were lower-middle class, I would rather move to another country, for example somewhere in Europe or New Zealand, because I could get a better standard of living for less work. In fact, many Argentinians have the opportunity to live and work in Europe because many of us have dual nationality with a European country. For example, I have a Swiss passport because my grandmother was Swiss, and if I have kids, they can get a Swiss passport too.
Lucia: Bariloche doesn’t really have a tradition of higher education, so most people from here go to Buenos Aires, Córdoba or Mendoza to study, but it is starting to develop one, so that’s one possibility for future opportunities here. Food could be another area of opportunity as Argentina is already in a pretty good position to grow crops. Fine fruits, such as cherries and berries could be grown here and produce a new source of income for people in this area.
What are the most important things to consider when doing business in Argentina?
Juan: Your word and reputation are very important. For example, if I want to do business with you, I will ask around about you, rather than just trust what you tell me and sign on the dotted line!
Lucia: Yes, for example, we were looking the other day at an apartment that we would maybe like to buy that is still under construction. It’s cheaper to buy it now because it’s not finished, but of course there’s a risk that it won’t get finished! So I asked “who’s the constructor, what’s his background, what has he done before?” And they told me several things, specifically things I could go and see, so that gave me more confidence in his work.
Juan: That’s the rule here. You try to find out the background of people who you’re going to do business with, and especially see if their word is trustworthy or not. And like I said before, you won’t just ask them directly for their background, you’ll ask your friends, your family “do you know this guy, or do you know someone who knows this guy?” You do a bit of investigation, but not through the normal channels, like for example a website that might look amazing. You want to know if on the other side, in his social life, if he’s a good guy. Does he change his group of friends every couple of years or months? That’s not a good sign!
What would you tell a foreigner wishing to set up a business in Argentina?
Juan: First of all, you need to have patience. There’s a lot of bureaucracy involved in setting up a business in Argentina, so you need to be prepared to go through the labyrinth of paperwork at the beginning! Next, you need to know that the rules in Argentina are somewhat flexible. But that can be a good thing if you haven’t got much money, but you are prepared to work really hard.
Lucia: I would say it’s a little bit harder for a foreigner to do business in Argentina, because you have to be very careful what you say, who you talk to. And things don’t quite work in the way the law says they do, so you would really need to have a local partner to tell you what you really need to do and what isn’t necessary!
For further reading on the topic of doing business in Argentina, take a look at the World Bank, PKF, PriceWaterhouseCooper and Baker Tilly International's manuals. For information on Argentine business etiquette, click here.
Thanks a lot to Juan and Lucia for the interview, and for the lovely stay that we enjoyed at Kospi!